EXHIBIT 99.1
MUTUAL TERMINATION AGREEMENT
MUTUAL TERMINATION AGREEMENT (the "Agreement"), dated as of November 2,
2004, by and between KRONOS ADVANCED TECHNOLOGIES, INC., a Nevada corporation,
(the "Company"), and FUSION CAPITAL FUND II, LLC, an Illinois limited liability
company (the "Buyer").
WHEREAS, the Buyer and the Company mutually desire to terminate the Common
Stock Purchase Agreement dated as of August 12, 2002, by and between the Company
and the Buyer (the "Purchase Agreement"). All capitalized terms used in this
Agreement that are not defined in this Agreement shall have the meanings set
forth in the Purchase Agreement;
NOW THEREFORE, the Company and the Buyer hereby agree as follows:
1. TERMINATION OF THE PURCHASE AGREEMENT.
The Purchase Agreement, and the other Transaction Documents between the
Buyer and the Company related to the Purchase Agreement (other than this
Agreement, that certain Registration Rights Agreement between the Company and
Buyer dated August 12, 2002, the "Registration Rights Agreement") are hereby
terminated effective as of the date hereof and any and all rights, duties and
obligations arising thereunder or in connection with the Purchase Agreement, and
the Transaction Documents (other then the Registration Rights Agreement and this
Agreement) are now and hereafter fully and finally terminated, provided,
however, that (i) the representations and warranties of the Buyer and Company
contained in Sections 2 and 3 of the Purchase Agreement, (ii) the
indemnification provisions set forth in Section 8 of the Purchase Agreement,
(iii) the agreements and covenants set forth in Section 11 of the Purchase
Agreement, including, but not limited to, the Company's and the Buyer's
obligations with respect to any pending purchases of Common Stock under the
Purchase Agreement, and (iv) the Registration Rights Agreement, shall survive
such termination and shall continue in full force and effect (the "Surviving
Obligations").
2. MUTUAL GENERAL RELEASE.
Except as may arise under or in connection with this Agreement and the
Surviving Obligations, the Company and the Buyer hereby release and forever
discharge each party hereto and its predecessors, successors and assigns,
employees, shareholders, partners, managing members, officers, directors,
agents, subsidiaries, divisions and affiliates from any and all claims, causes
of actions, suits, demands, debts, dues, accounts, bonds, covenants, contracts,
agreements, judgments whatsoever in law or in equity, whether known or unknown,
including, but not limited to, any claim arising out of or relating to the
transactions described in the Purchase Agreement and Transaction Documents
(other than the Registration Rights Agreement or the Surviving Obligations)
which any party hereto had, now has or which its heirs, executors,
administrators, successors or assigns, or any of them, hereafter can, shall or
may have, against any party hereto or such parties predecessors, successors and
assigns, employees, shareholders, partners, managing members, officers,
directors, agents, subsidiaries, divisions and affiliates, for or by reason of
any cause, matter or thing whatsoever, whether arising prior to, on or after the
date hereof, provided, however, that (i) this Agreement, (ii) the Surviving
Obligations including, but not limited to, the Registration Rights Agreement,
shall continue in full force and effect as the legal, valid and binding
obligation of each party thereto enforceable against each such party in
accordance with its terms.
3. MISCELLANEOUS.
(a) GOVERNING LAW; JURISDICTION; JURY TRIAL. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of Illinois, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of Illinois or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of Illinois. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of Chicago, for the adjudication of any dispute
hereunder or under the other Transaction Documents or in connection herewith or
therewith, or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
(b) COUNTERPARTS. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.
(c) HEADINGS. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d) SEVERABILITY. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
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(e) NOTICES. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Trading Day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company:
Kronos Advanced Technologies
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx Xxxxxx
If to the Buyer:
Fusion Capital Fund II, LLC
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0-000
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxx
or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) Trading Days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, and recipient facsimile number or (C) provided by a nationally recognized
overnight delivery service, shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.
(f) PUBLICITY; NON-DISCLOSURE. The Company agrees to issue the press
release set forth on EXHIBIT A hereto by no later than 9:00 am Eastern Time,
Thursday, November 4, 2004. The Company also agrees to file with the SEC the
Report on Form 8-K set forth on EXHIBIT B hereto by no later than 5:00 pm
Eastern Time, Thursday, November 4, 2004. The Company hereby unconditionally
agrees that without the prior written consent of the Buyer, the Company shall
not issue any other press release or make any other public disclosure of any
kind whatsoever with respect to (i) the Buyer, its employees, its managers, or
any of its affiliates, (ii) the Purchase Agreement or the transactions
contemplated under the Purchase Agreement, (iii) this Agreement, and (iv) the
termination of the Purchase Agreement. In addition, the Company hereby
unconditionally agrees that without the prior written consent of the Buyer, the
Company shall not make any other written or verbal communication of any kind
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whatsoever with respect to (i) the Buyer, its employees, its managers, or any of
its affiliates, (ii) the Purchase Agreement or the transactions contemplated
under the Purchase Agreement, (iii) this Agreement, and (iv) the termination of
the Purchase Agreement.
(g) RULE 144. With a view to making available to the Buyer the benefits of
Rule 144 promulgated under the 1933 Act or any other similar rule or regulation
of the SEC that may at any time permit the Buyer to sell any of its shares of
Common Stock to the public without registration ("RULE 144"), the Company agrees
to fully cooperate in the removal of restrictive legend from any Common Stock
share certificates delivered to the Company by the Buyer together with an
opinion of Buyer's counsel in customary form that registration is not required
under the Securities Act of 1933 or similar state laws in compliance with Rule
144.
(h) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns. The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Buyer, including by merger or
consolidation. The Buyer may not assign its rights or obligations under this
Agreement.
(i) NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
(j) FURTHER ASSURANCES. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement.
(k) NO STRICT CONSTRUCTION. The language used in this Agreement is the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.
(l) CHANGES TO THE TERMS OF THIS AGREEMENT. This Agreement and any
provision hereof may only be amended by an instrument in writing signed by the
Company and the Buyer. The term "Agreement" and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or supplemented.
(m) FAILURE OR INDULGENCE NOT WAIVER. No failure or delay in the exercise
of any power, right or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege.
* * * *
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IN WITNESS WHEREOF, the Buyer and the Company have caused this Mutual
Termination Agreement to be duly executed as of the date first written above.
THE COMPANY:
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KRONOS ADVANCED TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxx
Title: President & CEO
BUYER:
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FUSION CAPITAL FUND II, LLC
BY: FUSION CAPITAL PARTNERS, LLC
BY: ROCKLEDGE CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
